According to a recent note from KeyBanc Capital Markets, initial response to Apple’s (NASDAQ:AAPL) iPhone 16 shows that demand is “not great, but not terrible either.”
While there were concerns that pre-orders were down by double digits from last year, KeyBanc said in a note on Tuesday that demand was not as bad as some had feared.
“Performing the reason why demand has not been strong is due to the lack of exciting features in Apple Intelligence and the lack of language support in key regions such as China,” explained KeyBanc.
Despite the tepid demand, KeyBanc reports that supply chain partners have yet to see declines in construction plans, which currently stand at 89 million units, up 2% year-over-year in the second half of 2024.
This reportedly indicates that while excitement may be subdued, Apple has not adjusted its production expectations.
The note also highlights mixed results from KeyBanc’s September carrier survey, with comments on the iPhone 16 launch being “slightly disappointing.”
However, Apple Store spending figures show a 15% year-over-year increase in the first ten days of release and a 7% year-over-year increase over the release weekend, suggesting some positive traction despite initial concerns.
Additionally, the reduction in delivery times for the iPhone 16 appears to be a result of better manufacturing efficiencies rather than weak demand, according to KeyBanc.
Although the overall outlook for the iPhone 16 is not overly positive, supply chain feedback indicates that the situation is not bad either. As KeyBanc puts it, “initial feedback for the iPhone 16 isn’t great, but it’s not terrible either.”
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Reference;
Boughedda, S. (2024) Initial feedback for the iPhone 16 is not great, but not terrible either: KeyBanc By Investing.com, Investing.com. Investing.com. Available at: https://www.investing.com/news/stock-market-news/initial-feedback-for-the-iphone-16-is-not-great-but-not-terrible-either-keybanc-3653198 (Accessed: 8 October 2024).
